UK factories and farms see currency gains from Brexit

Michael Pooler and Andy Bounds

The fall in the value of the pound in the wake of Britain’s vote to leave the EU has not been detrimental to everyone in the country. For certain sectors of the UK economy the currency movement has been a benefit, making British goods cheaper for overseas customers.

Farmers have seen some early benefits from a falling currency. “[Sterling’s devaluation] has helped us in exporting lamb to Europe,” says Meurig Raymond, president of the NFU. “Any fall in our currency helps us in the domestic [agricultural] market.”.

But agriculture will be particularly sensitive to the eventual shape Brexit takes. The sector has drawn comfort from a government pledge to guarantee £6bn of annual EU subsidy payments, once the UK leaves the EU, though this extends only to 2020.

John Cook, a dairy farmer in North Yorkshire, said the majority of farmers had voted out. “Farmers don’t like all the red tape in Europe,” he said in an interview. He is optimistic that new agreements being sought by the likes of Brexiter Liam Fox, the minister in charge of pursuing post-Brexit trade deals, could open markets in Asia up to British dairy products even though there was ““a limit to how much food a country wants to import”.

He also warned that the EU would act to protect its farmers if the UK left the single market. “We will have to become more competitive,” he said. One way to improve efficiency would be to focus subsidies on capital investment rather than giving farmers direct payments for production or land ownership.

Equally important for both farming and the wider food industry — together worth £108bn in 2014, according to the latest available figures from the government — will be the continued ability to recruit seasonal migrant workers for picking and processing fruit and vegetables.

The National Farmers’ Union is lobbying to retain the right to such labour. But with public discontent at immigration levels seen as one of the prime factors behind the vote to leave, movement of people will be one of the most charged issues in tjhe Brexit negotiations.